Share This Article
After wearable technologies, special rules for foreign franchisors in Italy, 3D Printers à la mode, social media and fashion and online retail, this post drafted by my colleague Giangiacomo Olivi, will review the competition issues relating to distribution strategies in the fashion & retail sectors, from franchising and network agreements to commissioning, advanced licencing and, of course, e-commerce.
We have found out is that there is still some confusion about selective and exclusive distribution. With a selective distribution, the supplier undertakes to sell its products only to selected distributors, which in turn undertake not to sell the relevant products to other unauthorised distributors. On the contrary, with an exclusive distribution, the supplier agrees to sell its products to only one distributor for resale in a particular territory, while the exclusive distributor undertakes not to actively sell into the territory reserved to another distributor. In both cases, there are no antitrust concerns where the market share of each the supplier and the distributor does not exceed 30%, provided that the agreements do not contain the following forbidden restrictions (and our antitrust experts can certainly let you know more about that!).
As for the selective distribution forbidden restrictions:
- resale price restrictions;
- active or passive sales restrictions on authorized dealers (except for the restrictions on the wholesalers not to sell to end-users);
- restrictions on cross supplies between members of the same selective distribution system.
As for the allowed restrictions:
- restrictions on the place of establishment of the distributor;
- restrictions on the active sales to a territory where an exclusive distribution system is operated.
As for the exclusive distribution forbidden restrictions:
- resale price restrictions;
- general sales restrictions, other than restrictions on the wholesalers not to sell to end-users;
- restrictions on passive sales (responding to unsolicited requests) from other territories.
As for the allowed restrictions:
- restrictions on the place of establishment of the distributor;
- exclusive purchasing obligations from the supplier.
While there is no magic formula, we still think that any checklist should also include a basic knowledge of the relevant legal framework for distribution, as this will no doubt avoid a number of headaches. If you want to know more about this topic, feel free to contact me Giulio Coraggio or my colleague Giangiacomo Olivi, also join our IPTitaly group on LinkedIn.
Image courtesy of Flickr by David Bleasdale
(Visited 2 times, 1 visits today)
